Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Why I quit a $500K job at Amazon to work for myself

danielvassallo.com

Post reply on HN
Print view View original

221–230 of 241 posts

Re: Why I quit a $500K job at Amazon to work for myself

#221

Post by xiphias2 »

DVassallo wrote: post #7
hprotagonist wrote: post #3

I’m going all in on independence, and I’m going to try to make a living with my own bare hands starting from nothing. 500k/year in your last year is "nothing", huh? It really undercuts the entire thrust of the post, because you're starting with a nice big war chest and a hell of a safety net, not "nothing".

Yes, I saved a lot. About $1M in liquid assets. But I meant that I'll start with no income, no product, no business. I'll write another post about how I set up my safety net.

$1M is nothing when you could double it in a few years. Anyways good luck with your startup, and you can always go back, and take your quitting just as a vacation (many of my friends and I were doing the same thing, it's totally normal).

Re: Why I quit a $500K job at Amazon to work for myself

#223

Post by sytelus »

Dayshine wrote: post #6

> When I first hit $100K income, I would take a peek at my W2 for a few days admiring the six digits, but then it wore off. When I hit $200K, $300K, $400K, and $500K, it was the same thing. I would be delusional to think that earning $1M, or $10M would suddenly make it different. >What is out there that I could do that would make me excited waking up every day for the next 45 years that could also earn me enough mone…

A good balance between risk and returns is often considered to be 10% annualized. Annual comfort living expense for family of 4 is at least $120K net in most urban areas. Adding taxes, your gross would be around $150K. So $1.5M in investment is often considered good in theory for achieving financial independence.

The big issue however is that returns are averaged over long duration and so on some years you can end with as little as 2-3% or even negative. So you need to have 25-50% cushion to ride out bad turns in economy where you will be eating up principal itself. This is also important for any unforeseen circumstances such a medical issues that might rack up huge out of pocket (especially in US). Or children leaving for college needing to pay as much as $50K in tuitions. You also need at least 6 months of buffer ($50K) in case some bad event triggers losing your investment, for example, someone trying to to sue you. Given all these more practical investment asset size is $3M for financial independence.

Re: Why I quit a $500K job at Amazon to work for myself

#224

Post by sytelus »

EpicEng wrote: post #163
cpursley wrote: post #58

Earlier quoted context omitted.

What bubble/ivory tower part of the country are you in? $1m is enough. Especially with a paid-off mortgage. Most people get by for way, way less than that.

>$1m is not enough for most people in the US to never work again, unless they are quite frugal. i.e. "$1m is not enough for most people in the US to never work again assuming they want to live to the standard that I have become accustomed to." Which very likely does not apply to "most people". We do pretty well for ourselves and it's easy to forget that "most people" live paycheck to paycheck on far less.

Florida is popular retirement destination in US and comfort living cost there for 2 people is about $50K annual without taxes. Part of the high cost is that most people in our generation won’t have paid off their mortgage and monthly $1500 expense is expected just for that. Add on the top property taxes, high cost of medical, high cost of smart devices, phone plans, eating out even once a week - etc. If you have kids who are still dependent then you can easily add another significant chunk.

Re: Why I quit a $500K job at Amazon to work for myself

#225

Post by sytelus »

BeetleB wrote: post #112
Someone1234 wrote: post #35

Earlier quoted context omitted.

> you'd have $275k net. If you remove generous expenses, you have $200k a year in savings. In Seattle Washington? You'd have an extremely hard time making ends meet on $75K, it certainly isn't "generous." For example median home value in Seattle is $725K.

>In Seattle Washington? You'd have an extremely hard time making ends meet on $75K, it certainly isn't "generous." Renting an 1800 sq ft 3 bedroom house is $40K/year. That leaves $35K. Per month that's almost $3000. If you are having an "extremely hard time" paying for everything else with $3000, you may want to reevaluate your lifestyle. I'm not saying it's a fantastic lifestyle, but it's not a poor lifestyle. You'l…

I agree with you but grocery and other essentials bills itself comes out to be $2000 per month for family of 4. If you don’t care about organic food shopping, specific brands for quality and relying heavily on Wallart then it is possible to lower this at $1000. The eating out lunch at work itself is usually $300. Phone + cable + internet bills in family would add another $300 even when you haven’t upgraded in 4 years and so minimum TV subscription. The cost of gas and 2 car maintenance + insurance easily adds up to $500/mo. Replacing car, even mid end, adds another $500/mo for next 5 years. Computers, house maintenance (essential servicing) etc will add another $300/mo spread out. We haven’t yet got to various other utilities, schooling, dentist, optometrist etc.

I suppose bare minimum essential is probably $1000/mo but if you set needle to little above middle class but way below “rich” (which is not same as median) then $3000’for “everything else” is not sufficient.

Re: Why I quit a $500K job at Amazon to work for myself

#226

Post by kamaal »

hinkley wrote: post #96
cm2012 wrote: post #34

Earlier quoted context omitted.

Someone used to spending ~500k a year is not going to want the quality of life change of moving to 40k a year income. Their family would also not appreciate it.

The best thing I ever did for the family budget is work out a plan ahead of time for windfall money. Odds are OP will never make this much money again. Spending like this is the new normal is how rock stars and athletes end up broke at 40. You have to get out ahead of it. Since OP has a million saved I’m going to assume they had a similar plan in place. But. $150k a year with young kids (they haven’t begun to get exp…

>>Odds are OP will never make this much money again.

I hope these kind of things are taught to people early. Somewhere in school, or may be at a level of a social value system. The default every day mode for most people is to work very hard and fail. In fact you are lucky to achieve mediocre success even after working insanely hard.

>>The best thing I ever did for the family budget is work out a plan ahead of time for windfall money.

Yes the best thing to do in case of a windfall period is to take all the money and put it into some kind of an investment. So that when the gravy train stops, you have something to fall back on.

>>Spending like this is the new normal is how rock stars and athletes end up broke at 40. You have to get out ahead of it.

It isn't just rock stars and athletes, its your every day cousins and uncles, who have some career run, spend like no tomorrow, when the gravy train stops, they realize they have their best years behind them, all their money is gone, and nothing that they can do will help them even get by, let alone take them back to their past glory.

>>$150k a year with young kids (they haven’t begun to get expensive yet) in Seattle is pretty high. Getting that down is a good deal of effort that will distract from running the business.

A lot of people will be willing to show sympathy to you if you met with an accident and bad things happened to you beyond you control. But if you threw away a perfectly fine opportunity and asked them to settle for less, they would be asking why should they even be doing it at all.

Re: Why I quit a $500K job at Amazon to work for myself

#227

Post by wherehere »

DVassallo wrote: post #50
Dayshine wrote: post #19

Earlier quoted context omitted.

You don't need income with $1M. If you chuck that into an index tracker you can safely withdraw $40k a year...

Author here. My expenses are more like $150K a year, so my runway is only a few years. I have a family, two small kids (4 and 2), and live a comfortable life in Seattle. I could obviously adjust my standard of living, move somewhere cheaper, etc, but I didn't want my family to have to change anything from this experiment I'm doing with my life.

I am also living in Seattle area with couple of kids and my expenses are in the same ballpark.

Re: Why I quit a $500K job at Amazon to work for myself

#228

Post by wherehere »

cm2012 wrote: post #34
Dayshine wrote: post #19

Earlier quoted context omitted.

You don't need income with $1M. If you chuck that into an index tracker you can safely withdraw $40k a year...

Someone used to spending ~500k a year is not going to want the quality of life change of moving to 40k a year income. Their family would also not appreciate it.

Perhaps, he was earning 500k but not spending that much. 500k would give you around 300k after tax. Half of 300k can easily be spent in order to have normal life.

Re: Why I quit a $500K job at Amazon to work for myself

#229

Post by [deleted] »

mindcrime wrote: post #199
antisthenes wrote: post #159

Earlier quoted context omitted.

> You would not expect people to give that up. The question is why? I would absolutely expect people to give that up, as well as any senior economist student would tell you, the labor preference curve is backward-bending after you start making a certain amount of money. > He was so lucky and is giving it up! Aren't you curious why? Not in the slightest. There are multiple studies saying that happiness plateaus after…

I would absolutely expect people to give that up, as well as any senior economist student would tell you, the labor preference curve is backward-bending after you start making a certain amount of money. But a plateau would just mean he quit advancing. This guy didn't stop on a plateau, he stepped off a cliff. That's a pretty big difference.

[deleted]

Re: Why I quit a $500K job at Amazon to work for myself

#230

Post by pvinis »

antisthenes wrote: post #159
startupdiscuss wrote: post #138

Earlier quoted context omitted.

You're looking at it the wrong way (i think). The point is not that he is starving, or that he is desperate. The point of that number is what he gave up! The point is he gave up a job of 0.5 million, potentially 1 million in a few years. To top it off the job had reasonable hours, great people and he was getting positive feedback. You would not expect people to give that up. The question is why? Instead, you're point…

> You would not expect people to give that up. The question is why? I would absolutely expect people to give that up, as well as any senior economist student would tell you, the labor preference curve is backward-bending after you start making a certain amount of money. > He was so lucky and is giving it up! Aren't you curious why? Not in the slightest. There are multiple studies saying that happiness plateaus after…

Exactly that.

Also, the people (me included) that don't question "why" are the people that would do the same if they had the opportunity. Of course anyone can create the opportunity for themselves, and of course the income and spendings are relative, but no matter how you slice it, a half a million safety net, or even 1/10th that, is still a pretty big help to take the decision.

Post reply on HN